Natco win: Deterrent for FDI?
By: Rahul Dhote & Mita Sheikh, Krishna & Saurastri
March 20, 2012 / 12:39 IST
By: Rahul Dhote & Mita Sheikh, Krishna & Saurastri Associates
A compulsory licence was granted by the Controller General of Patents Designs and Trademarks in his order dated March 9th 2012, in the matter of NATCO Vs. BAYER. The Controller of Patents granted compulsory licence to Natco Pharma, an Indian pharma company to make and sell a cancer drug Sorafenib tosylate patented by Bayer Corporation, a German healthcare company. Sorafenib, marketed under the brand name Nexavar, is a drug used for the treatment of advanced stages of kidney and liver cancer. This is the first Compulsory Licence granted under Section 84 of Indian Patents Act, 1970. A Compulsory Licence is an involuntary contract imposed on a Patentee to unwillingly allow the other party to manufacture and sell its patented article. As per Section 84 (1) of the Patents Act, 1970, any person interested may make an application to the Controller for grant of compulsory license after the expiration of three years from the date of grant of a patent. A Compulsory Licence can be sought on any of the following grounds: - The reasonable requirements of the public with respect to the patented invention are not met, or
- The patented invention is not available to the public at a reasonably affordable price, or
- The patented invention is not worked in the territory of India.
Even if any one of the grounds is fulfilled, the Controller may grant the Compulsory License. In this case the Controller found all the three grounds to have been fulfilled and has granted the Compulsory License to Natco Pharma. With respect to the first ground, the Applicant that is Natco Pharma relied on the statistics of the World Health Organization publication, projecting about 30,000 patients to be affected by kidney and liver cancer for elucidating the requirement of the Nexavar. Patentee gave their own estimate of advanced stage patients who may be actually requiring the patented drug. Patentee also relied on the figures of sale by Cipla to show the availability of drug in the market. The reliance of the Patentee on the sale figure of Cipla who is an alleged infringer of their patent did not go well with the Controller. In principle the Controller accepted the statics of WHO publication and also relied on Form 27 filed by Patentee to evaluate the quantum of drug made available to the public and held that the reasonable requirement of the public was not being met by the Patentee. With respect to the second ground of reasonable affordability, one of the methods Applicant relied upon was, if a lowest paid government employee is taken as a standard, he will have to work three and a half years to be able to purchase the monthly dose of Nexavar at price of Rs. 2,80,000/-. The Patentee elaborately explained the complete process of drug discovery and that the marketed product cost is not only for the money spent on one specific drug but also on failed R&D as well as further research of the existing drug. The Controller did not agree with the pleadings of Patentee that the reasonableness has to be judged with respect to public as well as Patentee in view of all the investment made by Patentee. The Controller found price of Rs. 2,80,000/- per month
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